<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
----------------
OR
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
COMMISSION FILE NUMBER 0-25488
THE L.L. KNICKERBOCKER CO., INC.
(Name of Small Business Issuer in its Charter)
CALIFORNIA 33-0230641
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
30055 COMERCIO 92688
Rancho Santa Margarita, CA (Zip Code)
(Address of Principal Executive Offices)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 858 - 3661
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
-------------------------- ----------------------
Common Stock, No Par Value NASDAQ
National Market System
Common Stock Purchase Warrants NASDAQ
National Market System
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
NONE
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of the registrant's Common Stock, as of
May 6, 1996 was 14,493,757.
Transitional Small Business Disclosure Format Yes No X
--- ---
DOCUMENTS INCORPORATED BY REFERENCE
NONE
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
ITEM PAGE
- - ----
PART 1
------
<C> <S> <C>
1. FINANCIAL INFORMATION......................................................... 1
A. Condensed Income Statements (unaudited) for the three month periods
ended March 31, 1996 and March 31, 1995................................... 1
B. Condensed Balance Sheets at March 31, 1996 (unaudited) and
December 31, 1995......................................................... 2
C. Condensed Statements of Cash Flows (unaudited) for the three month
periods ended March 31, 1996 and March 31, 1995........................... 4
D. Notes to Condensed Financial Statements................................... 5
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS..................................................... 8
A. General Business Description.............................................. 8
B. Results of Operations..................................................... 9
C. Liquidity and Capital Resources........................................... 10
PART II
-------
1. LEGAL PROCEEDINGS............................................................. 11
6. EXHIBITS AND REPORTS ON FORM 8-K.............................................. 11
SIGNATURES.................................................................... 11
</TABLE>
i
<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
- - -------------------------------
THE L.L. KNICKERBOCKER CO., INC.
CONDENSED INCOME STATEMENTS
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
1996 1995
------------- -------------
<S> <C> <C>
Sales, net of returns $ 3,158,828 $ 1,948,340
Cost of sales 1,403,519 913,611
------------- -------------
Gross profit 1,755,309 1,034,729
Selling, general and administrative
expenses 1,264,380 691,280
------------- -------------
Income from operations 490,929 343,449
Interest and other income, net 44,425 20,865
------------- -------------
Income before provision for income
taxes 535,354 364,314
Provision for income taxes 212,648 149,369
------------- -------------
Net income $ 322,706 $ 214,945
============= =============
Net income per share (See
footnote 6) $ .02 $ .02
============= =============
Weighted average common
shares outstanding 16,057,063 10,856,620
============= =============
</TABLE>
1
<PAGE>
THE L.L. KNICKERBOCKER CO., INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,794,166 $ 2,469,750
Accounts receivable 4,167,978 5,456,701
Receivable from shareholder 179,731 260,561
Inventories 627,394 413,576
Note receivable 218,060 150,000
Prepaid expenses 1,529,690 1,244,885
Deferred income taxes 394,900 394,900
----------- -----------
Total current assets 9,911,919 10,390,373
MACHINERY AND EQUIPMENT, net 227,068 226,574
INVESTMENTS 785,505 590,000
OTHER ASSETS 5,833 6,667
----------- -----------
$10,930,325 $11,213,614
=========== ===========
</TABLE>
2
<PAGE>
THE L.L. KNICKERBOCKER CO., INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
expenses $ 398,268 $ 984,805
Commissions and royalties payable 279,163 407,503
Deferred income 93,333 43,590
Royalty committment 15,327 40,327
Income taxes payable 579,589 1,066,941
----------- -----------
Total current liabilities 1,365,680 2,543,166
DEFERRED INCOME 57,778 50,854
DEFERRED INCOME TAXES 19,450 19,450
STOCKHOLDERS' EQUITY:
Common Stock 7,139,244 6,574,677
Additional paid in capital 250,000 250,000
Retained earnings 2,098,173 1,775,467
----------- -----------
Total stockholders' equity 9,487,417 8,600,144
----------- -----------
$10,930,325 $11,213,614
=========== ===========
</TABLE>
3
<PAGE>
THE L.L. KNICKERBOCKER CO., INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------
1996 1995
------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 322,706 $ 214,945
Adjustments to reconcile net income
to net cash provided by (used in) operations:
Depreciation 12,000 6,234
Amortization 27,873 833
Amortization of deferred revenue (23,333) (22,222)
(Increase) decrease in:
Accounts receivable, net 1,294,129 (332,707)
Receivable from stockholder, net 84,475
Inventories (213,818) (105,866)
Prepaid expenses and other current assets (388,954) (330,556)
Increase (decrease) in:
Accounts payable and accrued expenses (586,538) (608,487)
Commissions payable (128,340) (68,873)
Income taxes payable (487,352) (310,925)
Reserve for legal settlements (10,000) 0
------------- --------------
Net cash used in operating activities (87,152) (1,557,624)
------------- --------------
Cash flows from investing activities:
Investments (115,505) 0
Purchases of machinery and equipment (12,494) (9,894)
Other assets 0 (42,163)
------------- --------------
Net cash used in investing activities (127,999) (52,057)
Cash flows from financing activities:
Proceeds from initial public offering of stock 0 4,332,152
Proceeds from exercise of common stock purchase warrants 564,567 0
Deferred offering costs 0 (109,630)
Repayments of principal on note payable to
stockholder 0 (94,132)
Payment of royalty committment (25,000) (15,000)
------------- --------------
Net cash used in financing activities 539,567 4,113,391
------------- --------------
Net increase in cash 324,416 2,503,710
Cash, beginning of period 2,469,750 106,553
------------- --------------
Cash, end of period $2,794,166 $ 2,610,263
------------- --------------
Supplemental Disclosure of Cash Flow Information:
- - -------------------------------------------------
Cash Paid for Income Taxes $ 700,000 $ 491,000
------------- --------------
</TABLE>
Noncash investing and financing activity - The Company received 400,000 shares
- - ----------------------------------------
of common stock in a company in exchange for performing marketing services in
each of the quarters ended March 31, 1996 and 1995. The Company has recorded an
asset for the discounted value of the stock received and a deferred revenue
liability which is amortized to income over the term of the marketing agreement.
4
<PAGE>
THE L.L. KNICKERBOCKER CO., INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1: As contemplated by the Securities and Exchange Commission under Item
- - ------
310(b) of Regulation S-B, the accompanying financial statements and footnotes
have been condensed and therefore do not contain all disclosures required by
generally accepted accounting principles.
NOTE 2: In the opinion of The L.L. Knickerbocker Co., Inc. (the "Company"), the
- - ------
accompanying unaudited condensed financial statements contain all adjustments
necessary to present fairly its financial position as of March 31, 1996 and
results of operations and cash flows for the three month period ended March 31,
1996. All adjustments were of a normal recurring nature. Results for interim
periods are not necessarily indicative of those to be expected for the full
year. Certain prior period balances have been reclassified to conform with
current presentation.
NOTE 3: The organization and business of the Company, accounting policies
- - ------
followed by the Company and other information are contained in the notes to the
Company's financial statements filed as part of the Company's December 31, 1995
Form 10-KSB. This quarterly report should be read in conjunction with such
annual report.
NOTE 4: During the first quarter of 1996, the Company received an additional
- - ------
400,000 shares of common stock of Tracker Corporation in exchange for marketing
services. The Company previously owned 400,000 shares which was reflected on
the balance sheet of the Company as an investment after applying a 60% discount
on the value of the stock due to certain restrictions and the "start-up" nature
of the entity. The additional 400,000 shares received in 1996 are valued in the
same manner.
NOTE 5: The Company capitalizes certain direct-response advertising costs and
- - ------
amortizes such costs over a four month period beginning on the date the
advertisment airs. The four month period approximates the period during which
future period revenues are expected to be received from each direct-response
advertising campaign. The nature of the direct-response advertising costs are
primarily advertising and design costs associated with print advertisements.
5
<PAGE>
THE L.L. KNICKERBOCKER CO., INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(continued)
NOTE 6: The Company completed a five-for-one split of common stock on August
- - ------
31, 1995. Earnings per share for the quarters ended March 31, 1996 and March
31, 1995 are presented on a post split basis. Earnings per share was computed
based on the weighted average number of common shares and equivalents
outstanding during the quarters ended March 31, 1996 and March 31, 1995.
Primary and fully diluted earnings per share are approximately the same. The
calculation of primary weighted average common shares outstanding is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Weighted average common shares
outstanding during the period 13,957,846 10,856,620
Incremental shares assumed to be
outstanding related to stock options
and warrants granted 2,099,217 0
---------- ----------
Weighted average common shares
and equivalents outstanding 16,057,063 10,856,620
========== ==========
</TABLE>
The Company had outstanding on a post-split basis 4,767,500 stock warrants and
options which were not included in quarterly earnings per share calculations
prior to June 30, 1995 because they were considered antidilutive based upon the
market price of the stock on that date. Subsequent to June 30, 1995, as a
result of an increase in the market price for the Company's stock, the warrants
and options were no longer antidilutive. Therefore, the earnings per share
calculation at March 31, 1996 includes the warrants and options because at the
time of the calculation the warrants and options were not antidilutive based
upon the market price of the Company's stock on such date.
NOTE 7: On March 13, 1996, the Company entered into an agreement to acquire 40%
- - ------
of the outstanding common stock of Pure Energy Corporation, a privately held
corporation. Under the terms of the agreement, the Company's Chief Executive
Officer will assume the post of Chairman and Chief Executive Officer of Pure
Energy Corporation. The Company will receive the 40% interest in exchange for
its committment to fund up to $1,000,000 of further development and marketing
costs associated with Pure Energy Corporation's product and by issuing in April
1996 400,000 stock options exercisable in the following manner, 200,000
exercisable at $8.50 per share and 200,000 at $12.00 per share . The Company
shall account for the performance of the investment on the funding committment
on the equity method of accounting.
6
<PAGE>
THE L.L. KNICKERBOCKER CO., INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 8: On February 7, 1996, the Company acquired 49% of Grant King
- - ------
International, Co. Ltd. located in Bangkok, Thailand. The Company acquired the
interest in Grant King International, Co. Ltd. by issuing 300,000 warrants
exercisable at $5.50 per share. The Company has recorded an asset in the amount
of $250,000 representing the ascribed value of the Company's investment in Grant
King International, Co. Ltd.
NOTE 9: In October 1995, the Financial Accounting Standards Board issued
- - -------
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation", which will be effective for the Company beginning
January 1, 1996. SFAS No. 123 requires expanded disclosures of stock-based
compensation arrangements with employees and encourages (but does not require)
compensation cost to be measured based on the fair value of the equity
instrument awarded. Companies are permitted, however, to continue to apply APB
Opinion No. 25, which recognizes compensation cost based on the intrinsic value
of the equity instrument awarded. The Company will continue to apply APB
Opinion No. 25 to its stock based compensation awards to employees and will
disclose the required pro forma effect on net income and earnings per share.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
--------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The following discussion should be read in conjunction with the financial
statements and the notes thereto appearing elsewhere in this Form 10-QSB.
GENERAL
The Company develops a diverse line of consumer products, contracts for the
manufacture of those products to the Company's specifications, and markets those
products to customers. The Company's strength and history has been its strategy
in marketing to the Home Shopping Industry by identifying the industry's key
product segments (i.e. collectibles, environmental systems, jewelry, health and
beauty) and building Brand recognition within those product segments. The
Company brings a celebrity or spokesperson to enhance the appeal of the product.
Using this strategy, the Company was the first to bring celebrities to the home
shopping industry. The Company's celebrity programs have included products
endorsed by Marie Osmond, Annette Funicello, Bob Mackie, Farrah Fawcett, Angie
Dickinson, Richard Simmons, Phyllis Diller, Joan Collins, and Rue McClanahan.
The Company plans to expand celebrity programs introducing new key product
segments.
The Company also sells consumer products beyond the Home Shopping Industry
through other direct response marketing channels such as print media
advertising, infomercials, and direct mail campaigns. The Company has also
developed product distribution through retail stores and retail catalog
accounts.
As a result of the Company's experience and knowledge in the area of electronic
retailing, the Company provides consulting services to outside companies in all
facets of direct response marketing; such as designing packaging, identifying
and negotiating celebrity endorsement, producing infomercials and advertising
spots, and overseeing entire marketing campaigns.
The Company is actively involved in the development of an alternative fuel
through its 40% ownership of the Pure Energy Corporation. Pure Energy
Corporation is in the process of developing a proprietary alternative fuel that
would produce the lowest possible emissions at the lowest cost to the public.
The Company, through its joint venture with Paxson Communications Corporation,
is currently developing infomercials for several new products and services. The
Company believes that the joint venture will provide synergistic opportunites
for strategic growth.
The Company is in the process of developing with Richard Simmons a collectible
line of angels called "Such an Angel". The Company anticipates revenue from
this source to be in the third quarter of 1996, although no assurance can be
given in this regard.
The Company is currently waiting final FDA approval on a patented, painless hair
removal system, called "Classy Lady". The inventor, Tom Mehl, and the Company,
through market research and previous experience in marketing a similar product,
believe there is a lucrative market for the product, although no assurance can
be given in this regard.
The intent of the Company in signing the above agreements is to identify and
introduce new, marketable products while expanding the Company's distribution
network.
8
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage of
revenues represented by items included in the Company's Statements of
Operations.
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
1996 1995
-------------- -------------
<S> <C> <C>
Revenue 100.0% 100.0%
Cost of revenue 44.4 46.9
Gross profit 55.6 53.1
Operating expenses 40.0 35.5
Operating income 15.6 17.6
Interest/other income 1.4 1.1
Net Income 10.2 11.0
</TABLE>
THE FOLLOWING COMPARISONS ARE FOR THE QUARTERS ENDED MARCH 31, 1996 AND MARCH
31, 1995.
Revenues
First quarter revenues increased 62.1% from $1,948,340 in 1995 to $3,158,828 in
1996. The increase in revenues was due primarily to an increase in sales from
both the Marie Osmond collectible doll line and Annette Funicello collectible
bear line . Revenues from the Marie Osmond collectible doll line increased from
$541,718 in 1995 to $1,598,652 in 1996, or 195%. The increase in Marie Osmond
doll sales is primarily due to continued brand recognition of the Marie Osmond
name and the Company's strategy of marketing dolls personally sculpted by Marie
Osmond and dolls with other personal connections with the celebrity. Revenues
from the Annette Funicello bear line increased from $67,593 in 1995 to $530,626
in 1996, or 685%. The "Guardian Angel" line of Annette Funcello bears continues
to grow with the majority of first quarter 1996 Annette Funicello bear sales
coming from the "Angel Heart" bear. The Company's direct response marketing
campaigns contributed $348,733 in revenues in the first quarter of 1996. The
Company recognized $385,460 in revenues from the sale of costume jewelry. The
Company is re-entering the jewelry business through its distribution agreement
and acquisition of 49% of Grant King International. Revenues from marketing and
consulting income decreased from $491,625 in 1995 to $412,833 in 1996 primarily
due to the time and focus placed on marketing the Pure Energy alternative fuel,
of which the Company owns 40%. Revenues from the Ionizer decreased from $906,564
in 1995 to $123,100 in 1996.
Gross profit
Gross profit increased 69.6% from $1,034,729 in 1995 to $1,755,309 in 1996 due
primarily to the growth in revenues from the Marie Osmond collectible doll
program, Annette Funcello collectible bear program, and direct response
marketing campaigns. The Company has successfully attained improved pricing on
porcelain dolls to the point where gross profit margins can exceed 60% on
certain dolls. Gross profit also increased from direct response revenues where
products are sold at retail prices, as opposed to wholesale prices to the home
shopping industry. As a result of the foregoing, the overall gross profit
percentage of the Company increased from 53.1% in 1995 to 55.6% in 1996.
9
<PAGE>
Selling, general and administrative expenses
Total selling, general and administrative expenses increased from $691,280 in
1995 to $1,264,380 in 1996. The percentage of sales represented by these
expenses increased from 35.5% to 40.0%. The primary reason for the increase as
a percentage of sales relates to the volume of new products under development, a
reserve for uncollectible accounts receivable and the greater volume of travel
expenses associated with the development of new products and quantity of shows
on QVC. The overall amount of expenses increased due to the following factors:
Commissions increased due to the corresponding growth in sales; reserve for
doubtful accounts receivable increased $242,931; advertising and promotion
increased $89,142 from $19,305 in 1995 to $108,448 in 1996 due to the release of
new products; and travel and trade show expense increased $30,228 from $51,432
in 1995 to $81,660 in 1996 due to the increase in Marie Osmond and Annette
Funicello shows on QVC which require the Company to transport employees of the
Company and celebrities to and from studios and provide lodging and incidentals.
Remaining expenses in this category were in proportion to the corresponding
revenues between 1995 and 1996.
Other income (expense)
Other income (expense) increased from $20,865 in 1995 to $44,425 in 1996 as a
result of an increase in interest income from the Company's cash and short-term
investment balances.
Net Income
As a result of the foregoing factors, net income increased 50.1% to $322,706 for
the three month period ended March 31, 1996 from net income of $214,945 for the
three month period ended March 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow used in operations was $87,152 due to the increase in inventory and
prepaid advertising costs associated with increased growth in sales volume in
both the Marie Osmond doll program and the Annette Funicello teddy bear line.
Cash used in operations was also impacted by decreases in accounts payable and
income tax payable, offset by a decrease in accounts receivable. The Company's
liquidity increased due to the influx of capital from the exercise of stock
options and warrants and due to the increase in profits experienced during the
first three months of 1996. The combination of the above factors resulted in an
overall increase in working capital from $7,847,207 at December 31, 1995 to
$8,546,239 at March 31, 1996. The current ratio for the Company increased from
4.09 at December 31, 1995 to 7.25 at March 31, 1996.
The Company had 2,050,000 warrants outstanding which were issued as part of the
unit offered in the initial public offering that were exercisable at the
warrantholders option at $1.30 per share. The Company had the right to redeem
the warrants at $.01 per warrant if the closing bid price on the common stock
averages in excess of 110% of $1.30 per share for over 20 consecutive days.
Upon the complete exercise of these warrants, the Company had the ability to
receive approximately $3,000,000 in cash. The Company has not exercised its
right to redeem the warrants, however the warrants were exercised voluntarily by
the warrantholders.
10
<PAGE>
The Company currently has approximately 81,900 warrants remaining to be
exercised of the 2,050,000 originally issued. Additionally, the Company
currently has 307,500 warrants remaining to be exercised associated with the
overallotment of shares in connection with the intial public offering. The
infusion of cash from the initial public offering and the subsequent exercise of
the common stock warrants has improved the liquidity of the Company
considerably. The Company also expects 410,000 of underwriters warrants issued
as compensation to the firm that took the Company public to be exercised in the
near future. Additionally, the Company has outstanding 1,368, 750 options to
acquire common stock held by various celebrities, spokespersons, consultants,
and officers and directors of the Company exercisable at $.75 per share. The
Company expects to receive additional funds from the exercise of these shares.
The above exercise of warrants and options should contribute to the liquidity
and working capital of the Company.
PART II. OTHER INFORMATION
---------------------------
Item 1 - Legal Proceedings.
- - ------
On February 27, 1996 a lawsuit was filed in Orange County Superior Court, Case
No. 759883, naming Louis L. Knickerbocker, Tamara Knickerbocker and the Company
as defendants. The plaintiff, Michael Elam, is a minority stockholder in MLF, a
company in which Mr. Louis Knickerbocker and Ms. Farrah Fawcett owned an
interest. Mr. Elam's lawsuit seeks damages for sums allegedly owed to him by Mr.
Knickerbocker from the operations of that company. Counsel for the Company
believes that the demand is unfounded and that the lawsuit is without merit.
Item 6 - Exhibits and Reports of Form 8-K.
- - ------
(b) Reports of Form 8-K
-------------------
A Form 8-K was filed during the quarter ended March 31, 1996 in connection
with a change in independent certified public accountants.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE L.L. KNICKERBOCKER CO., INC.
Date: May 10, 1996 By:
--------------------------------------
Anthony P. Shutts
Chief Financial Officer
Signing on behalf of the registrant and
as principal financial and accounting
officer.
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,794,166
<SECURITIES> 0
<RECEIVABLES> 5,151,065
<ALLOWANCES> 983,087
<INVENTORY> 627,394
<CURRENT-ASSETS> 2,322,381
<PP&E> 350,070
<DEPRECIATION> 123,003
<TOTAL-ASSETS> 10,930,325
<CURRENT-LIABILITIES> 1,365,680
<BONDS> 0
0
0
<COMMON> 7,139,244
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,930,325
<SALES> 3,158,828
<TOTAL-REVENUES> 3,158,828
<CGS> 1,403,519
<TOTAL-COSTS> 1,264,380
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 535,354
<INCOME-TAX> 212,648
<INCOME-CONTINUING> 322,706
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 322,706
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
